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2013 (3) TMI 557 - AT - Income TaxDeemed dividend - Section 2(22)(e) of the Income Tax Act - Share Application money received under Current Liabilities - Held that:- we are of the view that the amount received by the assessee does not come under the scheme of loan and advances, therefore, the ld.CIT(A) was fully justified in holding that the provisions of section 2(22)(e) are not attracted and hence the case falls outside the ambit of deemed dividend u/s 2(22)(e). We upholding the order passed by the ld. CIT(A). CIT(A) observed that it is agreed by the AO that the sums received are towards share application money. He further observed that when the nature of receipt partakes the character of share application money, it cannot be treated as loan/advance. He further observed that at the time of receipt of money the intention was to invest in shares of the appellant company and hence the nature of the receipt was not that of loan or advance. He further observed that only loans and advances can be considered as deemed dividend for the purpose of section 2(22)(e) and accordingly held when what has been received as share application money on which there is no dispute, the provisions of section 2(22)(e) are not attracted and hence deleted the addition made by the AO. CIT(A) on this account reject the grounds taken by the Revenue and Revenue’s appeal stands dismissed.
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